Lose the Yeast and Stop the Rise in Health Care Costs
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Martin P. Sellers
June 2, 2023
Introduction
So, what is the yeast in the health care industry that causes health care costs to continue to rise and in turn, make health care unavailable or unused by most Americans? It comes down to the complexity of how health care services are paid and our lack of a national public administration processes to analyze medical data. The complexity and multiple methods for paying for services, as well as the growth of technologies and new therapies that are more expensive, drive costs upward. Just as the impossibility of removing yeast from bread dough, there is little possibility of fixing the broken health care cost system without an unaffiliated public administration agency that can collect national data and set, analyze and monitor pricing as well as pursue and provide information on service effectiveness.
Costs
Health care expenditures grew to 18.3 percent of the national gross domestic product (GDP) this year which means that nearly one out of every five dollars was spent on health care. About 40 percent of that expenditure is paid through Medicare and Medicaid spending and about 30 percent is paid through private consumer spending. This past year’s level of spending is the highest in U. S. history (discounting years of war and pandemics). Costs have risen rapidly because of the growth in technology in medicine, the development and use of medical therapies and the increased use of medical tests. The fee for service method for paying for health care encourages over-testing (which an ill person appreciates). And we realize that new techniques and use of higher level and innovative technologies are a positive way forward in health care. However, these things add to health care costs. The hope of physicians is to find a cure for a patient’s illness, ease physical discomfort or determine a therapy to help manage an illness. Doing so results in referrals to specialists, repeat therapies and scheduling of multiple tests, all of which have costs. The National Center for Health Statistics (NCHS) is a collection point for health data and provides statistical information to those who request it. However, the information collected is not fully national, is not collected from most providers and there is no analyzing of health care costs compared to amount and types of service or service effectiveness.
At the very least, a public agency responsible for the collection and analysis of national health care cost data should monitor and analyze what is being spent, medical outcomes, efficient uses of the means of health care and certainly the prices of services.
Prices
The fee for service process is not monitored and not set up based on effective practices and resulting outcomes. Nor is fee for service competitively based. There is no overall public agency that centralizes information about fees billed or paid, number of visits made, referrals to specialists, time spent in hospital, type and cost of drugs, therapies recommended or technologies used. One way to get a handle on prices and health care costs is to adapt health information technologies to collect and analyze health care information, thoroughly. Electronic Medical Records (EMR) can play a large role in the health information technologies system.
EMRs
Collecting and submitting data to a central data collection agency would be a significant move toward enabling good and appropriate decisions about health care pricing, test effectiveness, quality of outcomes, facilitation of workflow, improving patient care and safety and more. Close to 80 percent of independent physicians have office-based EMR systems. And nearly all non-government hospitals have EMR systems. Though most systems are basic, collection of health care data is occurring. The barriers to centralizing the data for purpose of analysis are several: costs of technology, difficulty in changing from old to new technology, redesigning of systems, concerns about system obsolescence, lack of electronic organizational skills and concerns about violating the Health Insurance Portability and Accountability Act (HIPAA). In addition, and most difficult, is that there is a lack of interoperability between software systems making the centralized collection and analysis of data nearly impossible. Access to and collection of data is lagging behind the need to share and analyze that data so that cost analysis and service effectiveness can be meaningfully discussed.
Conclusion
The first step in determining options for impacting rising health care costs is in the data. If barriers to collecting and submitting health care information can be removed, and if a central public administrative agency such as the NCHS can take responsibility to find ways to collect and analyze data, there may be hope for slowing the surge in health care costs. Like yeast removed from dough diminishes growth of bread, a central health care agency collection, analysis and use of data through maximum use of EMRs will impact the growth of health care costs.
Author: Dr. Martin P. Sellers is Dean of the School of Arts, Humanities, and Social Sciences at Lincoln Memorial University in Harrogate, Tennessee. The MPA program at LMU is fully online. Before academics, Sellers worked for city, county, state, and national governments, including a stint with the US Department of Agriculture. [email protected] and @martysellers.
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Lose the Yeast and Stop the Rise in Health Care Costs
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Martin P. Sellers
June 2, 2023
Introduction
So, what is the yeast in the health care industry that causes health care costs to continue to rise and in turn, make health care unavailable or unused by most Americans? It comes down to the complexity of how health care services are paid and our lack of a national public administration processes to analyze medical data. The complexity and multiple methods for paying for services, as well as the growth of technologies and new therapies that are more expensive, drive costs upward. Just as the impossibility of removing yeast from bread dough, there is little possibility of fixing the broken health care cost system without an unaffiliated public administration agency that can collect national data and set, analyze and monitor pricing as well as pursue and provide information on service effectiveness.
Costs
Health care expenditures grew to 18.3 percent of the national gross domestic product (GDP) this year which means that nearly one out of every five dollars was spent on health care. About 40 percent of that expenditure is paid through Medicare and Medicaid spending and about 30 percent is paid through private consumer spending. This past year’s level of spending is the highest in U. S. history (discounting years of war and pandemics). Costs have risen rapidly because of the growth in technology in medicine, the development and use of medical therapies and the increased use of medical tests. The fee for service method for paying for health care encourages over-testing (which an ill person appreciates). And we realize that new techniques and use of higher level and innovative technologies are a positive way forward in health care. However, these things add to health care costs. The hope of physicians is to find a cure for a patient’s illness, ease physical discomfort or determine a therapy to help manage an illness. Doing so results in referrals to specialists, repeat therapies and scheduling of multiple tests, all of which have costs. The National Center for Health Statistics (NCHS) is a collection point for health data and provides statistical information to those who request it. However, the information collected is not fully national, is not collected from most providers and there is no analyzing of health care costs compared to amount and types of service or service effectiveness.
At the very least, a public agency responsible for the collection and analysis of national health care cost data should monitor and analyze what is being spent, medical outcomes, efficient uses of the means of health care and certainly the prices of services.
Prices
The fee for service process is not monitored and not set up based on effective practices and resulting outcomes. Nor is fee for service competitively based. There is no overall public agency that centralizes information about fees billed or paid, number of visits made, referrals to specialists, time spent in hospital, type and cost of drugs, therapies recommended or technologies used. One way to get a handle on prices and health care costs is to adapt health information technologies to collect and analyze health care information, thoroughly. Electronic Medical Records (EMR) can play a large role in the health information technologies system.
EMRs
Collecting and submitting data to a central data collection agency would be a significant move toward enabling good and appropriate decisions about health care pricing, test effectiveness, quality of outcomes, facilitation of workflow, improving patient care and safety and more. Close to 80 percent of independent physicians have office-based EMR systems. And nearly all non-government hospitals have EMR systems. Though most systems are basic, collection of health care data is occurring. The barriers to centralizing the data for purpose of analysis are several: costs of technology, difficulty in changing from old to new technology, redesigning of systems, concerns about system obsolescence, lack of electronic organizational skills and concerns about violating the Health Insurance Portability and Accountability Act (HIPAA). In addition, and most difficult, is that there is a lack of interoperability between software systems making the centralized collection and analysis of data nearly impossible. Access to and collection of data is lagging behind the need to share and analyze that data so that cost analysis and service effectiveness can be meaningfully discussed.
Conclusion
The first step in determining options for impacting rising health care costs is in the data. If barriers to collecting and submitting health care information can be removed, and if a central public administrative agency such as the NCHS can take responsibility to find ways to collect and analyze data, there may be hope for slowing the surge in health care costs. Like yeast removed from dough diminishes growth of bread, a central health care agency collection, analysis and use of data through maximum use of EMRs will impact the growth of health care costs.
Author: Dr. Martin P. Sellers is Dean of the School of Arts, Humanities, and Social Sciences at Lincoln Memorial University in Harrogate, Tennessee. The MPA program at LMU is fully online. Before academics, Sellers worked for city, county, state, and national governments, including a stint with the US Department of Agriculture. [email protected] and @martysellers.
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